Gilead Sciences (GILD) has projected its 2017 hepatitis C (or HCV) net product sales to be in the range of $7.5 billion–$9.0 billion, a significant fall from its $14.8 billion in HCV product sales in 2016.
The projected revenue fall can mainly be attributed to fewer new patients’ being expected to initiate Gilead Sciences’ HCV therapy in 2017.
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The above diagram shows the various factors that are expected to affect Gilead Sciences’ 2017 HCV product sales. The company has recently been facing stiff competition from other HCV players such as AbbVie (ABBV), Merck & Co. (MRK), and Bristol-Myers Squibb (BMY).
In 2015, Gilead Sciences witnessed 256,000 new patient starts in its HCV franchise in the US market. This number fell to 231,000 new patient starts in 2016. Gilead witnessed a one-time rise of ~20,000 new patients due to new access from two commercial payers and new patients treated under the Veterans Access (or VA) program in 2016. The launch of Epclusa in the US market in June 2016 also allowed for the treatment of warehoused genotype 2 and genotype 3 patients in 2016.
In absence of these factors, in 2017, Gilead Sciences expects to witness further falls in its new HCV patient starts in the United States to anywhere in the range of 150,000–175,000. Gilead also expects a fall in new HCV patient starts from ~105,000 in 2016 to ~75,000–85,000 in 2017 in the European Union Five (or EU5). The EU5 comprises the United Kingdom, Germany, France, Italy, and Spain.
Gilead has also projected a fall in new HCV patient starts in the Japanese market from ~88,000 in 2016 to ~30,000–40,000 in 2017.
If new patient starts in 2017 are lower than anticipated, Gilead Sciences’ share price could see the negative effects, as could the price of the Vanguard Total Stock Market ETF (VTI). GILD makes up ~0.37% of VTI’s total portfolio holdings.